Home Sweet Home, Insider-Tips on Minnesota real estate.

The best times to buy real estate and increase your wealth

Luxury homebuilder Toll Brothers is branching into distressed real estate acquisitions outside of its core homebuilding operations.

"We are excited to launch Gibraltar Capital at a time when we believe there are many potential investments arising from the distress in the real estate industry," said Toll Brothers CEO Douglas Yearley Jr.,

Home bargains abound for buyers with long time horizons, say experts.

I like to look for the silver lining whenever possible and in the case of residential real estate, I see some bright spots. First off, in my lifetime, I have never experienced mortgage interest rates at these low levels – under 5%. . In fact, most of us have never experienced such vast buying opportunities in our lifetimes. I have never seen as many houses on the market looking for buyers. It truly is a “shopportunity”

If they recognize this wealth building potential you should too!  How can you take advantage of one of the best times ever to invest in real estate?  Call me.

Search for Homes Across the Nation

Starting this summer, Realtors will have access to an online real estate library/archive with data on every property in the United States.

Dubbed the Realtors Property Resource (RPR), this powerful new tool is a project by the National Association of Realtors (NAR). RPR was created to help Realtors better serve their clients, providing unmatched access to tax and assessment data; property data; neighborhood, school, and demographic information; and maps, trends, and reports,

NAR said. In addition, RPR will include public record information, details of prior transactions, multiple listing service (MLS) data, and zoning information.

“RPR is welcoming news for our Realtor members who are always tech savvy and on the cutting edge of business innovation,” said Karl Lee, president of the Santa Clara County Association of Realtors.

Lee said this visionary project will provide NAR members with in-depth, trusted information on local properties and make it easier for them to help clients analyze their buying and selling decisions, including specialized property types, such as vacation homes. The advanced user profile and social networking component of RPR will help create online referral communities and inspire members to experiment with new business models, he explained.

According to NAR, RPR will be exclusive to Realtors and member of participating MLSs, and beta testing will begin in March of this year. On July 1, 2010, Realtor logins will begin to be activated across the country, and a phased roll-out will occur in the months following.

Q. Is the Highest Offer the best?

A.  Real estate not always secured with highest bid. Home sellers covet fewer contingencies, faster closings

Most sellers would be delighted to receive multiple offers. However, figuring out which offer to accept is not always as simple as you might think.

Suppose you receive three offers. One is for your asking price. Another is for $5,000 more. And the highest offer is for $10,000 over the list price. If you look at price alone, you'd have no reservations about accepting the highest offer.

However, there's more to consider about an offer than the price. The first offer might be from a preapproved buyer who has a $25,000 cash down payment and no appraisal contingency. This means that if the house appraises for less than the offer price, the buyer cannot use this to back out of the contract without risking losing his deposit.   The lender should have no problem granting the buyer a mortgage for approximately 50 percent of the sale price, even if the appraisal comes in low. The more cash down, the more likely the lender will approve the loan.

• The highest-price offer might be from a buyer with no down payment and an appraisal contingency. This means that if the property appraises for less than the purchase price, the buyer has an automatic out of the contract. Even if he doesn't want out, the lender won't be willing to grant a mortgage in the amount the buyer needs to complete the sale. With no downpayment there's a good chance that the buyer won't have enough extra cash to make up the difference between the appraisal amount and the purchase price.
• The highest-price offer might be from a buyer with no down payment and an appraisal contingency. This means that if the property appraises for less than the purchase price, the buyer has an automatic out of the contract. Even if he doesn't want out, the lender won't be willing to grant a mortgage in the amount the buyer needs to complete the sale. With no downpayment there's a good chance that the buyer won't have enough extra cash to make up the difference between the appraisal amount and the purchase price.
• The third offer could be contingent upon the successful close of the buyer's home that is currently under contract. If the deal on his house falls apart, the buyer can withdraw from your contract without penalty. If this happens, you'll be back on the market searching for a new buyer.

So, in terms of a risk analysis, the lowest price offer appears to be the best offer. One option would be to counter the lowest offer with a higher price, based on the fact that you have two offers higher than his. Before making a counter, however, consider that the buyer could say no and disappear form the scene leaving you with two riskier offers to choose from.

What to consider when reviewing a home purchase offer

A home purchase agreement is a complicated legal document. It will include all of the terms and conditions of the sale, most of which are negotiable. Some sellers focus on the price the buyer offers, minimizing the other terms and conditions. This approach can lead to trouble.

It's natural to want to sell for the highest price possible. But, the highest priced offer is not always the best offer. Evaluate every one of the terms and conditions of the purchase offer before making a decision. Since virtually every term is negotiable, consider your options. You can accept some terms and counter others in order Some sellers find it helpful to list the price, terms and conditions of an offer on a sheet of paper. Next to each item on the list, make a note as to whether the term or condition is acceptable or unacceptable.

• The terms would include such things as the closing date, when possession will be delivered to the buyer, the specifics of how the buyer will finance the purchase, how closing costs are to be shared, what's included and excluded from the sale and the buyer's various contingencies.
• Common buyer contingencies are for inspections of the property, financing, property appraisal and review of the property title record. Usually, buyers can withdraw from a purchase without penalty if they made a good faith effort to satisfy contingencies but were not successful.
• Pay attention to the contingency deadlines. From the seller's standpoint, the shorter the contingency time period, the better. Still, these time periods should not be unreasonably short.

After reviewing an offer, you might feel the price is low, the closing date is too long and you need more time after closing to move out. In addition, you don't want to include the washer and dryer. If the offer is acceptable in all other respects, you might counter with a higher price, shorter closing, and more time to vacate. As an incentive for the buyer to accept your counter, you might agree to include the washer and dryer. A successful negotiation often involves give and take. to fine-tune the contract to meet your needs.

HOME SELLER TIPS: No-contingency offers are appealing. But, they can be risky, particularly if the buyer hasn't had a chance to adequately inspect the property before making an offer. You may be wise to counter a contingency-free offer with a short contingency for the buyer to inspect the property. It's far better to have any unknown defects discovered before closing than it is to be drawn into a legal dispute after closing. It's never a good idea to counter a buyer's inspection contingency out of the offer.

There's a definite advantage to a shorter rather than a longer closing. The longer the closing, the higher the likelihood that something might go wrong. For example, occasionally, a buyer who was fully approved for a mortgage subsequently loses his job and can't close the sale. If you need more time to move, ask the buyer to rent the property back to you for a while after closing.

THE CLOSING: Make sure that your contract includes a provision for the buyers to show evidence of their preapproval and verification of the funds needed to close if they haven't already done so.

Personal Property

THE BASIC LAW OF FIXTURES.

The rule is quite simple. But its implementation is sometimes difficult.

A "fixture" is moveable personal property that has become permanently attached to the land or structure, such as with bolts, nails, screws, cement, glue or other attachment method, to transform it into real property.

For example, suppose a house or condo has beautiful living room draperies. Those draperies are hanging by hooks from a drapery rod that is attached to the wall or ceiling. Therefore, the law of fixtures converts the drapery rod from personal property into real property that is included in the sale of the home. But the beautiful draperies that are not permanently attached to the structure remain personal property, which are not automatically included in the sales price so the seller can remove them.

However, many printed real estate sales contracts specify "window coverings" are included in the sale price (unless the buyer and seller agree otherwise). For this reason, it is important to closely read the printed sales contract to determine if personal property, such as the draperies, is included in the sales price.

HOW TO AVOID FIXTURE TROUBLE. The best way home buyers and sellers can avoid fixture misunderstandings is to work with an experienced Realtor and have a well-written contract.